“The Gen Y’s and the middle cohort of wealth and income earners really are stuck,” said demographer Mark McCrindle in an interview with news.com.au. “It’s really hard for them to get ahead compared to the previous generation and they end up not only stalling as we’re seeing now on wages and net worth but failing to get into what became for the Baby Boomers the key source of their net worth—the family home.”
These 25 to 34-year-old individuals are not the only ones having a tough time in the market. Even the Gen X bracket of 35 to 44-year-olds are also struggling with the lack of wage growth and net worth, according to the 2013 to 2014 figures from the Australian Bureau of Statistics. These people are too wealthy to classify for income support and benefits, yet too poor to afford their homes without undue amounts of mortgage stress.
“We’ve still got a middle class but the middle class does not buy what it used to,” McCrindle said. “Being in that middle quintile does not automatically mean you’ve got a house paid off; in fact, far from it.”
It does not help that the affordability of homes in both Melbourne and Sydney are continuing to deteriorate.
“The problem is that much of the new housing is not particularly affordable,” said CoreLogic’s head of research Tim Lawless. “New housing needs to be affordable for someone on an average income.”
Collections: Mortgage News